Call options....nah

[malleefarmer]

Jul CBOT 470 calls cost 26c. If you buy a call & hold/hope, need spot CBOT to rally to/beyond 500c to pay off. That’s a big ask given record global stocks unless the USD gets hammered. Futures carry is an issue for cash & call strategy?

But futures being low a spark to market in march april may end up in the money?

Nah wishful thinking thoughts from marketing gurus?

[ajl]

Jul CBOT 470 calls cost 26c. If you buy a call & hold/hope, need spot CBOT to rally to/beyond 500c to pay off. That’s a big ask given record global stocks unless the USD gets hammered. Futures carry is an issue for cash & call strategy?

But futures being low a spark to market in march april may end up in the money?

Nah wishful thinking thoughts from marketing gurus?

Ag commodity options are a good deal for the seller not buyer. I think that you should sell calls on rallies. Trouble is cash flowing margin calls. You are hedged if you have the underlying commodity in your bins. I do this with stocks: sell covered calls, and it works fairly well. Don't have the margin calls since I have the underlying asset in the account. Doing something similar with grains is much more tricky but could be rewarding if you can find a way to do it.

[Braveheart]

You could sell out of the money puts to finance purchasing your call option. Put options would only have time value as volatility is low.

Is there really much upside price potential to capture? While the call may not cost much besides brokerage (financed by puts) the chances of the call expiring worthless are pretty good.

More money might be made hunting for a strong basis.

[farming101]

Risk/Reward is a little high

Thinking the same thing as ajl. Unpriced inventory - sell calls against it. Of course then you need to ask whether currency risk is covered and what shape your local market is in if your short calls are exercised.

Another play might be to buy cheap OTM options and in larger numbers. Commission is higher but if there is a rally you may be able to obtain your target profit by selling the options back before expiration (they may never get ITM where they could be exercised).

Kansas pit is really getting pounded lately. May be some prospects there for a price pop before Chicago.
I think prices are open to further downside right now.

[malleefarmer]

Above scenario is common here in Aust if growers think/hope prices are going to rally but need cash flow sell grain for cash at harvest and replace with options

Some years it works most it doesnt just putting it out there tis a "marketing" forum